July 30, 1996

Some Republicans may be taking off the yellow ribbons they wore as Senator Kennedy kept his own bill hostage because of Medical Savings Accounts. But what a hostage deal he finally got!

Ironically, on the 31st anniversary of the enactment of Medicare (socialized medicine for the elderly), a Republican-led conference committee may be setting the stage for "single payer": compulsory government medicine for everyone with private medicine outlawed.

Some are celebrating because Kennedy finally agreed to a vestige of free-market reform: Medical Savings Accounts. The four-year "demonstration" program of crippled MSAs seems designed to demonstrate failure. Only 750,000 accounts are to be permitted, in the most heavily regulated (small-group) insurance market, with limits that would guarantee adverse selection (only 65% of the deductible).

Democrats want to limit the build-up of funds in MSAs. But the accumulation of funds is the whole idea. As the fund increases, the sensible person would want to increase the size of the deductible and decrease his insurance premiums, becoming less and less dependent on third-party payers. But the KK bill limits the deductible to $1500-$2250 for individuals and $3000-$4500 for families. (Where did the $2250 come from? Premiums decrease significantly for deductibles of $2500; deductibles of $2250 are not generally available.)

Bad as the proposal is, some Republican leaders support it with the idea of getting an MSA foot in the door. They hope the idea might gain so much momentum that it couldn't be stopped.

But suddenly, new Clinton-style provisions materialized that were in neither the House nor Senate version: federal price controls on individual insurance premiums combined with guaranteed-issue, mental health parity, and mandated benefits. This means guaranteed losses for any insurer foolish enough to write individual medical insurance. Individual medical insurance would disappear. There would be zero MSAs, not 750,000. (When Medicare passed, Lyndon Johnson made insurers tear up the policies owned by senior citizens. Kennedy is about to finish what Johnson started. Enter "single-payer"!)

We don't know what has happened to the Clintonesque criminalization of medicine and "administrative simplification" provisions. (There were promises to make a few changes, but final wording is not available.) A secretary in Virginia, in transcribing medical society minutes on the dangers of the Kassebaum-Kennedy bill, called it the "Custom Bomb Kennedy Bill." We don't think that's a malapropism. It's right on target. The bill is a bomb for private medicine, disguised as mild "free- market" insurance reform.

Senate conferees have finally been appointed: Trent Lott (R- MS), William Roth (R-DE), Pat Moynihan (D-NY), Nancy Kassebaum (R-KS), and Edward Kennedy (D-MA). House conferees are: Bill Archer (R-TX), Michael Bilirakis (R-FL), Thomas Bliley (R- VA), David Bonior (D-MI), William Clay (D-MO), John Conyers (D- MI), John Dingell (D-MI), Harris Fawell (R-IL), Sam Gibbons (D- FL), William Goodling (R-PA), Dennis Hastert (R-IL), Henry Hyde (R-IL), Bill McCollum (R-FL), Pete Stark (D-CA), William Thomas (R-CA), and Henry Waxman (D-CA).

The conference committee will meet this week, and a report is expected by Friday. Call today! Don't let the death knell for patient freedom sound on the 2nd annual Medicare Patient Freedom Day! Tell the conferees to do their job, and not to rubber stamp what is probably the Lott-Hastert-Clinton-Kennedy Election Year political deal. (The conference committee can do anything, including the right thing, which is to kill this monstrous bill.)

Call Congress TODAY. The Capitol Hill switchboard is (202)224-3121 or (800)962-3524.

Tell the conferees to disregard the Kennedy hostage deal, start from scratch, and take the product home for the August recess. Let the voters see exactly what they will be getting.

FIRST, DO NO HARM.